Finding the right solutions for optimizing your routing and scheduling is essential to your business. Choosing the routing software that is most practical and effective for your operations will allow you to manage your drivers, your vehicles, and your fuel consumption in the most cost-effective way. You can choose from a number of strategies that will streamline your dispatching processes and allow you to achieve higher productivity and profitability. Understanding the various methods that are sometimes used to route and schedule deliveries will enable you to make the best choices for your transportation business.
Six Methods Commonly Used in the Transportation Industry
While route optimization software typically uses a combination of algorithms and techniques to determine the best approach to routing and scheduling, manual dispatch methods are usually less accurate and less cost-effective. These six methods represent the most basic and commonly used strategies for companies that do not use software to optimize their routine processes.
In this method, the dispatcher assigns the vehicle closest to the pickup point to the delivery. It optimizes the speed of pickup and distribution but does not take full advantage of the transportation capabilities of the entire fleet. Pure Greedy also necessitates the use of multiple vehicles to transport each package individually, which can result in increased wear-and-tear on vehicles and higher fuel costs overall.
For large-scale delivery operations, Pure Greedy is an impractical choice. It works best for taxi companies that only carry passengers from one point to another and other small-scale delivery businesses. This is generally the most basic and simple-to-use strategy, which may account for its popularity among small businesses. It produces the lowest overall profitability of all six methods.
A variation on Pure Greedy, the Greedy Carpool, also assigns vehicles based on their proximity to the pickup point. These vehicles will pick up multiple packages from the distribution point and deliver them to their destinations in order of how close the delivery point is to the pickup point. Greedy Carpool usually works best with a centralized distribution point and a relatively limited delivery range.
While Greedy Carpool does perform better than Pure Greedy, it is relatively limited in utility because it depends on multiple packages being available in a single location for pickup. This works best for home package delivery services like grocery deliveries and smaller business operations with a relatively limited range for delivery services. Like Pure Greedy, Carpool does not account for the need for rush services or prioritizing deliveries. This makes it less practical for companies that offer a range of services and delivery options for their customers.
The Easy Wins method accepts only easily profitable deliveries and transportation requests. Rather than allowing all requests for delivery within a specific geographical range, Easy Wins looks for the most beneficial and fastest trips for each vehicle. This means that some journeys are entirely rejected, while others are prioritized. Rejecting some customers or putting their deliveries at the back of the line to facilitate faster service for others can be a risky solution to the optimization problem.
Easy Wins are often implemented by deploying vehicles on a roaming or centralized basis. These vehicles and drivers are then immediately dispatched to pick up packages and to deliver them on a most-profitable to least-profitable base. In theory, this would allow companies to avoid shipments that offer little prospect of high profits. In practice, however, this will often alienate customers and will not allow companies to use their fleets in the most optimal way possible.
Along the Way
Rather than considering vehicles on an individual basis, the Along the Way method looks at the entire movements of vehicles within the fleet to determine if a shipment is convenient for one or more pickups going in the same direction. This method is often used for ride-sharing companies and their drivers to maximize the potential income from a single trip with multiple pickups and deliveries.
One drawback to the Along the Way strategy is that it can sometimes result in less-than-optimal use of your drivers and your resources. For example, using the Along the Way method could send one driver all the way across town without considering the potential for shorter trips close to where he or she started. These deliveries might be ignored because they are not in the specific direction of travel for the driver at the outset of the journey. This can result in less efficient use of your time and your resources.
Defer and Consolidate
Companies that use the Defer and Consolidate strategy to handle scheduling and routing issues typically wait until they have a number of packages for pickup before beginning to run a route. They then drop off all of their deliveries and return back to the starting point to begin the process again.
The drawbacks possible with Defer and Consolidate processes are relatively obvious:
• Most companies do not know the number of deliveries they will have on any given day.
• Waiting around for more packages to arrive will delay the delivery of the ones already in hand. This can result in unhappy customers and a loss of business in some cases.
• Defer and Consolidate typically results in inefficient use of driver time, which can significantly reduce profits.
Selecting a different method will usually increase productivity and profitability for business enterprises compared with using Defer and Consolidate.
Finding the most practical solution for each shipment is where Route Optimization really shines. It uses a combination of strategies to optimize routing and scheduling based on current conditions, workloads, available vehicles and drivers and the most practical way to manage all of the deliveries in process at any given time.
This method is the most cost-effective and profitable for nearly every transportation company. A route optimization software is designed to look at many different factors and to determine the most effective method of delivering the goods in each specific case. This makes Route Optimization an excellent choice not only for companies that specialize in package deliveries but for a range of other fleet vehicle drivers:
• Service professionals, including plumbers, HVAC technicians, and electricians
• Foodservice delivery professionals who work with restaurants and groceries
• Outside sales associates
• Public utility workers
The Benefits of Professional Optimization and Scheduling
Choosing the right fleet routing software is essential to your company’s long-term success. As the above examples demonstrate, using the most efficient methods can add up to increased productivity and improved profitability for your business. If your company routinely dispatches personnel to work locations outside your building, selecting the right software can make a significant difference in your overall productivity and the quality of your logistics.
How Algorithms Are Evaluated
In most cases, algorithms are compared with each other using a same-day pickup and delivery problem that involves the same number of locations, packages, and vehicles. Each scenario is consistent for all tests of the various algorithms. The test problem rewards on-time pick up and delivery and penalize failure to meet the parameters of each shipment.
In multiple test runs, Pure Greedy performed worst of all algorithms. Route Optimizing performed best in terms of profit and efficiency. This disparity demonstrates the importance of prioritizing the optimization of routes and schedules when selecting a software package for your business.
The Gehring & Homberger 1000-customer Instance
One of the most commonly used methods for testing the efficiency of free route optimization software is the Gehring & Homberger 1000-customer instance. This problem uses customer locations that may be random, clustered, or a combination of both. By using the 1999 Gehring & Homberger 1000-customer instance, it is possible to compare the performance of a variety of software packages in a general way.
The Gehring & Homberger benchmark, however, has some severe downside issues:
• The dataset does not account for the differences in size among different companies. For example, it treats a small service-oriented business like a plumbing company or local delivery service in precisely the same way that it would treat a company that does perform about 1,000 shipments each day.
• Gehring & Homberger also does not make any allowances for the actual mix of delivery types and dispatching requirements for individual companies. Companies that predominantly provide services to a specific area or who are under varying deadlines depending on their clients may not be able to assess software and algorithms effectively by using these datasets.
• Finally, the Gehring & Homberger benchmark does not consider factors like road closures, traffic, and other realities of daily life. This alone makes it an impractical benchmark and testing resource for companies that must do business in urban areas.
For most companies, the most practical way to choose routing and scheduling software is to try it out firsthand. While free route optimization programs may not provide the range of functions and capabilities that you need, taking advantage of any free trials to test out these systems is typically a great way to determine whether a particular routing and scheduling solution is appropriate for your needs.
The Benefits of a Free Trial
In many cases, companies offer a free route planner with unlimited stops on a trial basis. This will allow you to determine if the fleet routing software is appropriate for your needs and will ensure that you achieve the best results. By testing a route planner with multiple stops online for free, you can more easily decide on the right free route optimization solutions for your scheduling and routing needs.
The best way to evaluate a free route planner with unlimited stops is to plug in your own historical data to see how you could have routed or dispatched vehicles more efficiently. Taking advantage of these free route planner trials is one of the most practical ways to find out if a particular software solution is the right one for you.
Opti-Time is a top-rated routing and scheduling software solution with a proven reputation for reliability. By trying this route planner for multiple stops online for free, you can evaluate its ability to manage your company’s operations. This will give you a clear picture of the benefits of Opti-Time for your company and your routing and scheduling requirements.
Putting All the Pieces Together
By exploring the available options for optimizing your routing and scheduling processes, your company can take the first steps toward finding the perfect solution for your needs. Opti-Time, for instance, uses precise geocoordinates to determine the most practical and cost-effective solutions for all types of deliveries, service visits, and other fleet activities.
Choosing a routing and scheduling system that has robust features will allow your company to use it more effectively. Some of the most critical elements of Opti-Time include the following:
• The ability to track the progress of your drivers and packages, which will allow you to keep your customers posted about the estimated arrival time for your technicians or deliveries
• Route calculation algorithms that suit the way your company does business, including 100+ constraints, real-time and batch optimization taking into account traffic conditions.
• Profile creation capability for vehicles, drivers and starting points, which will streamline the job order entry process
• Automated and manual order entry capabilities for managing these processes in the most effective way
• Optimization of routes and dispatch activities with drag-and-drop capability
• Signature collection for improved customer service
• Robust reporting and analytics capabilities designed to suit the needs of small businesses, large delivery companies and all the enterprises in between
• Cloud access to the system for any time, anywhere updating
Whatever routing system you choose, you should look for the features you need now and those you may need in the future. Selecting a route optimizing solution that incorporates the most advanced algorithms is a solid step in the right direction for your company’s ongoing profitability in the competitive marketplace.
In our next blog, we will explain the benefits of choosing the cloud for your optimization software implementation. Cloud deployment offers real advantages for your company and your ability to manage multiple fleet vehicles from anywhere you happen to be.
Executive Director, Opti-Time Inc.